Commencement of Lay Time

For lay time to commence, a ship must be regarded as having arrived at the port where operations are due to take place. For a ship to be legally regarded as an arrived ship, it must satisfy certain requirements. The test of whether a ship is an arrived ship was developed by Lord Reid in the case The Johanna Olderndorff (1973): The vessel was chartered under a port charter to carry bulk grain from the United States to Liverpool/Birkenhead. As there was no berth free on the vessel’s arrival, the port authority ordered the vessel to anchor at Mersey Bar, which was seventeen miles from dock but still with- in the administrative limits of the port. The shipowners tendered the notice of readiness to load, but the charterers argued that lay time could not commence as the ship was not an arrived ship for the purposes of loading. Lord Reid stated: “On the whole matter I think that it ought to be made clear that the essential factor is that before a ship can be treated as an arrived ship she must be within the port and at the immediate and effective disposition of the charterer and that her geographical position is of secondary importance. But for practical purposes it is so much easier to establish that, if the ship is at a usual waiting place within the port, it can generally be presumed that she is there fully at the charterer’s disposal. I would therefore state what I would hope to be the true legal position in this way. Before a ship can be said to have arrived at a port she must, if she cannot proceed immediately to a berth, have reached a position within the port where she is at the immediate and effective disposition of the charterer. If she is at a place where waiting ships usually lie, she will be in such a position unless in some extraordinary circumstances proof of which would lie in the charterer.” Hence, on this basis, to have arrived at a port, a vessel must have reached either the loading/discharging place or-should that place be busy-at the normal waiting place or within the fiscal (commercial) area of the port.